Increase in rate of interest is a matter of concern for homebuyers who are planning to buy a house at this time.
New Delhi: Banks as well as non-banking financial companies are quite aggressive in the housing finance market. But only seven per cent customers find it easy to get a home loan these days. While rising interest rate is a cause of worry, customers are also intimidated by the long payback period and tedious process involved in securing a loan.
According to a consumer poll by property site MagicBricks, 93 per cent customers have apprehensions about home loans and the process of securing it. For 45 per cent of prospective homebuyers, rising interest rates for home loans remains an impediment in buying their dream house.
The consumer sentiment has only become stronger after last month’s hike in repo rate by the Reserve Bank of India (RBI). Increase in the rate of interest is a matter of concern for homebuyers who are planning to buy a house at this time.
Long payback period is a worrying factor for around 27 per cent borrowers, whereas 21 per cent feel that the tedious process of applying for a home loan is the biggest problem.
Only 7 per cent borrowers feel that it is easy to get a home loan these days. The main concern of banks these days is to make sure that the borrower can comfortably repay the loan on time.
“Home loans are available from mainly 2 types of lenders – commercial banks and housing finance firms. Lenders may quote different rates of interest and other terms and conditions, so homebuyers should contact several lenders to make sure you are getting the best value for money,” said E Jayashree Kurup, head (editorial and advice), Magicbricks.
Many banks have started simplifying the process for those customers whose credit history is clean. Buyers with a clean borrowing track record and consistent income are likely to avail a hassle-free loan. The higher the monthly disposable income, higher will be the loan amount you will be eligible for.
Typically, a bank assumes that 55-60 per cent of the monthly income is available for repayment of loan. But some banks calculate the income available for EMI payments based on an individual’s gross income and not on his disposable income.
“While applying for a home loan, banks ask for all legal documents relating to the house being bought, identity and residence proof, latest salary slip, Form 16 and last six months bank statements/balance sheet. If all your documents are clean and as per the bank requirements you should not face any problem in availing a home loan,” added Kurup.